Fintech

Alexander Babakov, vice-president of the State Duma, stated on Thursday, March 6th, that the BRICS (Brazil, Russia, India, China and South Africa) alliance is working on creating its own currency and will submit proposals at the organisation's upcoming summit in August in South Africa.   The declaration was not only the culmination of cooperation efforts between the fifth emerging economies to preserve their position in the global system after Western powers worked since the 1990s to prevent them from assuming their positions in international economic organisations — especially the World Bank and the International Monetary Fund. However, it also raised many questions about the impact of the new currency on the global financial system, particularly given the strength of the five economies in the international arena and the alliance's stated intention to expand to include additional developing nations such as Saudi Arabia, Iran, Egypt, and Bangladesh.   This paper tries to predict the consequences of creating the new currency on the structure of the global financial system and its impact on other major currencies, considering the European Union's experience in creating the Euro.